NU Online News Service, March 30, 3:40 p.m. EDT
Insurance fraud in New York's no-fault auto system increased almost 9 percent between 2008 and 2009, according to a New York State Insurance Fraud Bureau report.
The report, which was released earlier this month and delivers fraud figures in all lines of insurance annually to the Governor's Office, found that no-fault auto insurance fraud accounted for 54 percent of all fraud reports received by the bureau in 2009.
In total, the report notes that the bureau received 13,433 suspected fraudulent no-fault claims in 2009, up from 12,339 in 2008.
The number of suspected fraudulent no-fault claims for the year far outpaced all other forms of insurance fraud reported to the bureau. The bureau received a total 24,920 claims for 2009.
According to the New York Alliance Against Insurance Fraud (NYAAIF), the number of suspected fraudulent no-fault reports has increased by more than 30 percent since 2005.
The bureau report also cites Insurance Information Institute (I.I.I.) statistics noting that New York's no-fault claim costs are the second-highest in the country and are 109 percent higher than the U.S. average of $4,152.
"As an inevitable consequence, auto insurance rates for New York drivers are increasing as well," the report said.
Citing the New York State Insurance Department's efforts to combat no-fault fraud, the report noted that Superintendent James Wrynn has proposed revisions to Regulation 68, which implements the no-fault statute.
The proposed revisions, according to the report, would:
o Modify prescribed forms to require more information to ensure that claims paid are medically necessary. The report also said, "Insurers would have greater latitude to deny health services that are not provided or are not billed in compliance with the applicable fee schedule, thus reducing payment of fraudulent claims and instances of over-billing."
o Simplify procedures required for insurers to suspend all payments for claims submitted by the owners of medical clinics suspected of fraud while an investigation of the clinics' licensing status is underway.
o Require insurers to schedule medical examinations they request, so as not to overly burden the insured.
o Raise the maximum attorney fee from $850 to $2,500 to reflect inflation and to reduce the incentive for claimants and providers to file small claims separately. The minimum attorney fee would also be eliminated "to encourage the consolidation of claims in arbitration and litigation."
Ellen Melchionni, president of NYAAIF, said in a statement, "No-fault fraud is often committed by organized criminal enterprises operating corrupt medical clinics that submit fraudulent claims for treatment that was either not performed or not necessary. Unfortunately, it's innocent New Yorkers who are footing the bill for this fraud through higher auto insurance premiums."
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